What are the features of valid contract?

Features of Valid Contract can be clearly known under the heads Consensus ad idem, Certainty,
Free Consent, Capacity of Parties, Consideration, Legal Formalities, Lawful Object, Legal
Obligations, Possibility of Performance and, Agreements not declared void.

Consensus ad idem: Consensus ad idem means identity of minds. That means there should be
no difference between ways of thinking of offerer & offeree. Both of them should understand the
same thing in the same way. In the absence of consensus ad idem, the contract is not valid.
Example: A has two houses one at City A and the other at City B. He wants to sell his
house situated at City A. Now he is making an offer to B to sell away one of his house to which
he gives his acceptance. Here A is thinking about house at City A and B has given acceptance
with a view to purchase house at City B. Here is no consensus ad idem.
Certainty: The wording used in the contract must be certain. Uncertain wording makes the
Contract Void.
Related case is Taylor Vs Portington. In this case there is a Contract between A and B
according to which A has to modernize his house and B has to join as tenant. If the mode of
modernization is satisfactory to B. Here court decides that their is no Certainty and therefore it is
Void.
Free Consent: Both parties should enter into the Contract with Free Consent. There should be
no physical pressure (coercion) or mental pressure (undue influence). Absence of free consent
makes the Contract Voidable. A Voidable Contract may become either Valid or void depending
upon intention of the suffering party.
A case on this point is Ranganaya Vs Alwar Setty. In this case B gives a threatening to A
saying that he (B) will not allow cremation of dead body of A`s husband, unless A adopts B`s
sons. Here it is decided that there is no free consent from the side of A. There it is voidable, at
the option of A.
Capacity of Parties: Both parties should have eligibility or qualification to enter into a Contract.
Such eligibility is called Capacity of Contract. Minor insolvent person`s, lunatic persons etc have
no capacity to contract.
Related case is Mohiribeabee Vs Dharmades Ghosh. In this case A is a money lender and
B is a minor. A Contract gets formed between them according to which B has to pledge his
property with A to obtain a loan. On that occasion the minor executes a deed also saying that
money lender has write off lien on the pledged property till settlement of debt. There after the
minor sues to get in his property back without settling the debt. Money lender claims that he has
write-off lien as per the deed. Here court decides that the deed executed by minor is void and
therefore lender has no lien.

Consideration: Both parties presenting the Contract should get benefited mutually.
Consideration may be in the form of cash or goods or act or abstinence. Consideration need not
be adequate.

Legal Formalities: Contract may be oral or documentary. In case where it is oral, the concept of
legal formalities is not applicable. If the contract is of documentary nature, all legal formalities
like stamp duty etc must be properly fulfilled. If legal formalities are not satisfied the contract
becomes unenforceable.
Example: A and B have written their agreement on Rs. 10/- stamp where it is to be
written actually on Rs. 100/- stamp. It is not Valid Contract.
Lawful Object: To attain validity object of the contract must be lawful. Un-lawful object makes
the contract illegal & hence void.
Example: There is a contract between X and Z according to which Z has to murder Y for
a consideration of Rs. 10000/- from X. It is unlawful object.
Legal Obligations: To attain validity contract must be capable of creating legal obligations. One
directional consideration leads to friendly relations and two directional consideration leads to
legal relations.

Possibility of Performance: It should be possible to perform the event agreed in the contract.
Impossibility makes the contract void.
Example: A contract to join two parallel lines, has no possibility for performance and
hence such a type of contract is void.
Agreement not declared void: Certain types of agreements are declared to be void by statues.
As such agreements are harmful to society and they are named as Agreement opposed to public
policy. Agreements in restraint of trade, Agreements in restraint of marriage, Agreements in
restraint of personnel freedom etc come under Agreement opposed to public policy.
If an agreement satisfies all these features, then it becomes a contract. So All Contracts are
agreements, but all agreements are not Contracts.
According to Sec. 10 of Indian Contract Act All agreements are contracts if they are made by
free consent of the parties, competent to contract, with a lawful object, for lawful consideration
and are not hereby expressly declared to be void.

Explain the classifications of contracts?

In connection with contracts, there are four types of classifications. Types of contracts in contract
law are as follows;
1.
On the basis of Formation,
2.

On the basis of Nature of Consideration,

3.

On the basis of Execution and

4.

On the basis of Validity.

Types of Contracts on the basis of Formation

On this base Contracts can be classified into three groups, namely Express, Implied, Quasi
Contracts.
Express Contracts: The Contracts where there is expression or conversation are called Express
Contracts. For example: A has offered to sell his house and B has given acceptance. It is Express
Contract.
Implied Contract: The Contracts where there is no expression are called implied contracts.
Sitting in a Bus can be taken as example to implied contract between passenger and owner of the
bus.

Quasi Contract: In case of Quasi Contract there will be no offer and acceptance so, Actually
there will be no Contractual relations between the partners. Such a Contract which is created by
Virtue of law is called Quasi Contract. Sections 68 to 72 of Contract Act read about the situations
where court can create Quasi Contract.
Sec. 68: When necessaries are supplied

Sec. 69: When expenses of one person are paid by another person.

Sec. 70: When one party is benefited by the activity of another party.

Sec. 71: In case of finder of lost tools.

Sec. 72: When payment is made by mistake or goods are delivered by mistake.
Types of Contracts on the basis of Nature of Consideration
On this base, Contracts are of two types. Namely Bilateral Contracts and Unilateral Contracts.
Bilateral Contracts: If considerations in both directions are to be moved after the contract, it is
called Bilateral Contract.

Unilateral Contract: If a consideration is to be moved in one direction only after the Contract, it
is called Unilateral Contract.
Types of Contracts on the basis of Execution
On this base Contracts can be classified into two groups. namely, Executed and Executory
Contracts. If performance is completed, it is called executed contract. In case where contractual
obligations are to be performed in future, it is called executor contract.
Types of Contracts On the basis of Validity
On this base Contracts can be classified into 5 groups. namely Valid, Void, Voidable, Illegal and
Unenforceable Contracts.
Valid: The Contracts which are enforceable in a court of law are called Valid Contracts. To attain
Validity the Contract should have certain features like consensus ad idem, Certainty, free
consent, two directional consideration, fulfillment of legal formalities, legal obligations, lawful
object, capacity of parties, possibility of performance, etc.
Void: A Contract which is not enforceable in a court of law is called Void Contract. If a Contract
is deficient in any one or more of the above features (Except free consent and legal formalities).
It is called Void Contract.
Voidable: A Contract which is deficient in only free consent, is called Voidable Contract. That
means it is a Contract which is made under certain pressure either physical or mental. At the
option of suffering party, a voidable contract may become either Valid or Void in future. For
example: there is a Contract between A and B where B has forcibly made A involved in the
Contract. It is voidable at the option of A.
Illegal: If the contract has unlawful object it is called Illegal Contract.
Example: There is a contract between X and Z according to which Z has to murder Y for a
consideration of Rs. 10000/- from X. It is illegal contract.
Unenforceable: A contract which has not properly fulfilled legal formalities is called
unenforceable contract. That means unenforceable contract suffers from some technical defect
like insufficient stamp etc. After rectification of that technical defect, it becomes enforceable or
valid contract.

Example: A and B have drafted their agreement on Rs. 10/- stamp where it is to be written
actually on Rs. 100/- stamp. It is unenforceable contract.
Void Contracts and Illegal Contracts
All illegal Contracts are void, but all void contracts are not illegal:An illegal Contract will
not be implemented by court. So, illegal contract is Void. A void contract may not be illegal
because its object may be lawful.
The Contracts which are collateral to illegal contract are void, But the contracts which are
collateral to Void contract may be Valid:An illegal makes not only itself Void but also the
contracts connected to it. But a contract collateral to void contract may attain Validity because
object of main contract is lawful.
Void Contracts and Voidable Contracts
Becoming Valid: A Voidable Contract may become Valid at the option of suffering party. But a
Void Contract can never and never become Valid.
Third Party Rights: In case of Voidable Contracts third party may attain rights on concerned
property, If the third party gets the property before the Voidable Contracts gets declared as Void.
But in case of Void Contract third party cannot get any right.

Discuss in detail the consumer protection act, 1996?

Acc to section 2(d) of consumer protection act 1986 consumer means any person who
1.buys any goods for a c consideration which has been paid or promised or partly paid and
partially promised
2. hires or avail of any services for a consideration which has been paid or promised or partly
paid and partly promised.
Thus if any person: either (i) buys any goods for a consideration (ii) hires or avails of any
services, he is consumer
This act was enacted by Indian parliament in dec 1986. This was implemented on April
1987. Further in 1993 and 2002 many provisions were amended by act.
This act is implemented all over India except in jammu&Kashmir.
RIGHTS OF CONSUMERS
1.section 6 of the act enshrines the following rights of the consumers:
2. the right to be protected against the marketing of goods and services which are hazardous to
life & property.
3. the right to be informed about the quality, quantity, potency, purity, standard and price of
goods or services.

i)
ii)
iii)
iv)
v)

4. the right to be assured wherever possible access to a variety of goods and services at
competitive prices.
5.The right to be heard and to be assured that consumers interest will receive due consideration
at appropriate forums.
6. The right to seek redressed against unfair trade practices or unscrupulous exploitation of
consumers.
7. The right to consumers education.
WHAT CONSTITUTES A COMPLAINT
1.if consumers have suffered loss as result of any unfair trade practices adopted by the trader.
2. If the goods purchased suffer from any defect.
3. If consumers have been charged a price in excess of the price displayed or fixed
WHO CAN FILE A COMPLAINT
1) A Consumer
2) Any voluntary consumer organization registered under the societies registration act,1860
3) The Central Government
4) The State Government or Union Territory Administration.
CONSUMER PROTECTION COUNCILS
Act provides for establishment of a central consumer protection council by the central
government and state and district consumer protection councils by the state government
CENTRAL CONSUMER PROTECTION COUNCIL
As per section 3 of this council it is composed of 150 members:
the chairman shall be the minister in charge of department
vice chairman shall be the minister of state
the minister of food and civil supplies
8 members of parliament -5 from the loksabha and three from the rajyasabha
the commissioner of scheduled castes and tribes
THE STATE CONSUMER PROTECTION COUNCIL
As per section 7(2) of the act council shall consist of
a) the minister in charge of consumer affairs
b) such number of other official or non-official members representing such interests as may be
prescribed the state government.
c) such number of other official or non-official members ,not exceeding 10.
CONSUMER DISPUTES REDRESSAL AGENCIES
Section 9 of the consumer protection act provides for the establishment of a three tier consumer
disputes redressal system at the district, state, and national level.
HOW TO FILE A COMPLAINT
1. The name , description and address of the complainants and the opposite party.
2. The facts relating to complaint and when and where it arose
3. Documents in support of allegations in the complaint

4. The relief which the complainant is seeking

5. The complaint should be signed by the complainant or his authorized agent.
REMEDIAL ACTIONS
1. To remove the defect pointed out
2. To replace the goods with new goods of similar description
3. To return to the complainant the price
4. Not to offer the hazardous goods for sale
5. To discontinue the unfair trade practice
6. To withdraw the hazardous goods from being offered for sale
7. To provide for adequate costs to parties
8. To remove the defects or deficiencies in the services in question.
SUGGESTIONS LEADING TO BETTER CONSUMER PROTECTION
1. There should be more and more awareness on the part of consumers.
2. More and more NGOs ,civil society organizations should come forward
3. The consumer should lodge a specific complaint with supporting information
4. The consumer should try to understand the view-point of the seller before making a
complaint.

Discuss the duties and rights of agent and principal?

Rights of Agents.
1.
Right of Retainer: Agent has right to deduct the amount which is due to him by
principal, from amount payable to principal.
2.
Right of stoppage in transit: In case where agent is personally liable, he has
right to stop the goods in transit. The good may be moving towards customer or principal.
3.
Right to claim Remuneration: As per the terms of agency contract, agent has
rights to claim remuneration.
4.
Right of Indemnity: Principle of indemnity gets operated between principal and
agent where principal is implied indemnifier and agent is implied indemnity holder. So
agent can make principal answerable for all types of sufferings.
5.
Right of lien: Agent can exercise right of lien but contract act has not specified
whether it is general lien or particular lien. Therefore the nature of agents lien depends
upon mutual understanding.
Duties of Agents
1.

Agent should follow the instructions given by the principal.

2.
If agent comes across any complicated situation, he has to communicate that
situation to principal and his advice is to be obtained.
3.
Agent should behave in his capacity as agent, he should not run the transaction in his
own name.
4.

Agent should not make secret profits by utilizing reputation of the principal.

5.
Agent should safe guard property of principal particularly upon happening of events
like death of principal, insolvency of principal, etc.
6.
Agent should maintain proper accounting records to enrol the transactions run by
him. Agent has to remit amounts to principal properly.
7.

Agent has to remit amounts to principal properly.

8.
Agent should not carry on delegation.
Liabilities of Agents.
Actually agents binds over principal to his activities but there are some situations where
agent comes across personal liability. Those situations are as follows;
1.
Terms of contract of agency may create personal liability to agent.
2.
The tradition which is in operation in that particular type of business. May also
create personal liability to agent.
3.
If agent does not behave in his capacity as agent and thus runs the transaction in his
own way, personal liability arises.
4.

When agent acts for foreign principal, agent is personally liable.

5.

Pretending agent is personally liable.

6.
When agent acts for principal who has not come into existence, agent is personally
liable.
7.
In case where principal cannot be sued, Customer sues agent and thus agent is
personally liable.
8.

When agency is coupled with interest then also agent is personally liable.